Gov. Edwards, DHH Outline Cuts to DHH in House Budget Proposal

May 11, 2016

BATON ROUGE - Today, Governor John Bel Edwards and the Louisiana Department of Health and Hospitals (DHH) outlined how the proposed changes to the Executive Budget, HB 1, would threaten vital health care services and families in the State of Louisiana. This week, the House Appropriations Committee Chairman unveiled drastic changes to the budget without prior consultation with legislators and the administration. The plan would likely close hospitals across the state, including our flagship hospitals that train the next generation of medical professionals, eliminate waiver programs that provide lifesaving services, and would limit the state’s ability to provide licenses to facilities and adequately investigate complaints. In addition, the state is at risk of losing more than $1 billion in federal funding.

In April, Gov. Edwards proposed a budget to the legislature that recognizes a $600 million deficit remaining for the fiscal year that begins on July 1. Gov. Edwards intends to call the legislature into a second special session to raise additional revenue to adequately fund our priorities.

“The budget proposal I presented to the legislature does not reflect my priorities, and I intend to work with the legislature to raise the revenue to properly fund critical services, such as TOPS, health care services, and higher education,” said Gov. Edwards. “However, the plan presented by the House Appropriations Committee this week teeters between irresponsible and reckless. When we are talking about services that literally mean the difference between life or death and the future financial stability of our state, we should be working in a collaborative manner with a common goal – to make sure the people of Louisiana are cared for in the most efficient way possible. While we are all working to make sure we can end the cycle of dangerous cuts to education and health care, including TOPS, this plan is nothing more than a political stunt that jeopardizes the future of our state and puts families at unnecessary risk.”

“The haphazard manner in which the House Appropriations Committee crafted this budget will be devastating to Louisiana’s health care system,” said Dr. Rebekah Gee, Secretary of DHH. “The governor proposed a responsible plan that kept critical services intact in a more responsible way. Unfortunately, that plan concocted by the chairman jeopardizes life-saving services for some of the state’s most vulnerable patients and families, our critical public-private partnership hospitals, and potentially ends public medical education in the state. We simply cannot let the state go down this path of destruction, and this administration is working night and day to protect these important services.”

Under the plan submitted this week by the House Appropriations Committee, the following health care services would be impacted:

Private Partners:

Current funding levels may provoke all public private partners (PPP) to exit their contracts, threatening multiple communities’ with the total closure of their hospitals

Medical Education:

Public medical education would effectively end in Louisiana, eliminating training programs for up to 1,900 medical residents from across the country who are expecting to start their residencies here this July and threatening a generation of consequences to our health care system

Graduate medical education would be eliminated without properly funded teaching hospitals which would struggle to maintain quality programs

Health Standards:

Cuts to the Office of the Secretary would eliminate up to 25 percent of the jobs in the Health Standards department, or licensing section(Without proper inspections and licensing, all state provider facilities would be at risk of lacking proper licensing, potentially putting patients in uninspected, unlicensed, and possibly unsafe facilities)

Unlicensed facilities (hospitals, etc.) would be ineligible to participate in major federal programs, such as Medicare, throwing their business models into chaos.

Waivers:

New cuts to our Medicaid budget would slash waivers and optional programs that care for our state’s most vulnerable patients and families, placing these populations in extreme danger, devastating families who will be without care, and exposing the state to huge litigation costs due to likely violation of federal law and lawsuits from advocates and families.

The following waivers and programs, affecting over 5,600 individuals and families, would be eliminated to meet the budget targets set by the House Appropriations Committee:

Adult Day Health Waiver: 900 Recipients

Pediatric Day Health Care: 235 participants

Reduced Independent Living Services through New Opportunities Waiver: 1,567 recipients

Children’s Choice Waiver: 1,227 recipients

Supports Waiver: 1,739 recipients

Residential Options Waiver: 26 patients

Fraud, Waste, and Abuse:

Cuts to our administration programs eliminate tools we use to prevent fraud, waste, and abuse, including:

Electronic verification of visits (EVV)

Cutting Waiver controls and tools we use to prevent waste, abuse, and neglect (Support Coordination services)

Rural Hospitals:

Cuts of over $12 million State General Fund (SGF)

DHH would be forced to cut rural hospitals below the levels we are legally obligated to fund due to the Rural Hospital Preservation Act